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What You Need To Know About The MN Trust Code For Drafters Part III: Limitation on Action Contesting Validity of Revocable Trust

Often when people set up their estate plan they will ask the attorney “Can someone challenge this?” Truthfully, anyone can try to challenge a person’s estate plan – the bigger question is whether that person would be successful in his or her challenge. Even if the testator attempts to prohibit someone from challenging his or her estate plan under his or her Will, according to Minn. Stat. §524.2-217, “A provision in a will purporting to penalize an interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probably cause exists for instituting proceedings.”

Under the new Minnesota Trust Code (“MN Trust Code”), the statute of limitations for contesting the validity of a revocable trust is 3 years after the settlor’s death. See Minn. Stat. §501C.0605. However, under the statutes, a trustee of the trust can shorten the limitation period to just 120 days if the trustee provides notice to an individual of the trust’s existence. The notice must also include:

A copy of the trust instrument;

The trustee’s name and address; and

The time allowed for the individual to commence a proceeding to challenge the validity of the trust.

The statute does not define who must be notified; however, it is advisable to provide notice to the same individuals that you would notify if a probate proceeding commenced, i.e. interested parties. Yet, the trustee has the responsibility to determine who should be notified.

Additionally, under Minn. Stat. §501C.0605, the trustee of the trust may proceed with distributing the trust property pursuant to the trust terms and will not be held liable for doing so unless i) the trustee is aware of a pending judicial proceeding contesting the validity of the trust; or ii) the trustee has been notified of a possible judicial proceeding to contest the trust and the proceeding begins within 60-days after the individual contesting the trust sends notice to the trustee. If a beneficiary of a trust receives a distribution from the trust, which is ultimately ruled invalid in whole or in part, it is required that such distribution be returned to the extent that the invalidity applies to said distribution.

If you are a trustee of a trust and have questions about administering the trust properly, or are seeking to contest a trust, contact an attorney for more assistance.

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Jen is a founding partner at the law firm Sykora & Santini, which focuses on business law and estate planning. Prior to forming Sykora & Santini, Jen spent the majority of her professional career in the financial services industry in Boston, working in the legal departments of two investment management companies while attending law school. View all posts by Jennifer Santini

2 thoughts on “What You Need To Know About The MN Trust Code For Drafters Part III: Limitation on Action Contesting Validity of Revocable Trust”

Hello Ms Santini:
I’m in Boston and just read parts of your article.
Question: Do you know whether the Minnesota six-year statute of limitations begins to run on breach of trust even if the trustee remains on the job?
Is there a Mn or other case?
Thanks much,
Bryan Hansen
209 275 4915
Cambridge Mass and
St Paul Mn

Thank you for your question, Bryan. We cannot provide specific legal advice on this site. Feel free to contact Jen directly with any questions you may have. jen@sykorasantini.com. Thanks for reading Epilawg!

About Epilawg

A collection of legal and non-legal insights for living your life and planning for the resolution of your life story. Topics cover business, estates, trusts, tax, real estate, finance and more provided by a variety of professionals in those areas. Learn more >